Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1887-06-02
HOW 1T WAS DONE.
one of Jay GouId's Happiest Financial
transactions.

Brooklyn Times.
The other evening group OF bankers
ord LAWYERS were conversfng at one Of
.bo leading clubs when the chat turned
mon the testimony of Jay Gould before
~. Pacific railway commission. One of the
- nresent asked Mr.. Edward L. An
draws. the prominent railroad lawyer of
@L;s civ. TO explain the transaction of
Could connected with the Kansas Pacific
80 which has been the subject of so
mich recent comment.
Nv Andrews narrative was as power
tni conclusive aud clear an account of
+b;s remarkable business as | have yet
heard.
Understood it," he said. 1t is almost in
credible The government commission
has unearthed the facts and circumstan-
cos of Gould's attack upon trust. This
sacuritv has always been regarded even
Nv the most INSCRIPTIONS corporate
,5snipulstors as something too sacred to
- tempered with. But Gould WAS not
Testrained by these trifes, as the proofs
and confessions dragged out by the gov
eminent officers have shown. The Kan
sss Pacific Railway Company owned S3,-
mn 600 OF the capital stock of connect
mo road known as the Denver Pacific
Railway. The Kansas Company wishing
10 raise money, prepared to issue bonds,
and in order to secure the purchasers of
f+s bonds, it placed this Denver Pacific
stock. together with other assets, in the
hands of Jay Gould and Russell Sage, as
trustees for the bondholders. This
security was evidenced by the Kansas
Pacific consolidated mortgage, executed
an May !, 1879, and, by its terms, the
Denver Pacific stock was delivered to
Gould and Sage, to hold in trust, for the
benefit of the expected owners of $50, 000,-
ao1 of bonds So ends the first scene of
,1is financial drama.
"Six months elapse and we come to
January, 1880. More than $4,000, 900 of
the consolidated bonds had been sold
when the scheme was ineugurated.
Besides being trustee of the mortgage,
Gould was the controlling stockholder of
the Kansas Pacific company. The plan
was conceived to consolidate the stocks
Of the Union Pacific and Kansas Pacific,
with the valuable franchises of the Denver
Pacific. As the two former stocks were
worth between 80 and par, the effect of
suca consolidation would be to increase
the value Of the Denver Pacific TO the
same level. But So, OO0 900 out OF the S4,-
1G0. 00O.Of the entire Denver Pacific capital
stock belonged TO the trust for the Kan
sgs Pacific bOndhOlders. Jay Gould, as
their trustee, was bound to defend their
trust, and to secure every benefit RttainR-
be for it. But instead of performing this
legal and moral duty, Gould so managed
inst the Denver Pacific stock disappeared
entirely from the trust. IL vas exchanged
for Union Pscitc Railway stock, and was
WORTH s. goo, 000 But neither that stock
nor its proceeds, nor anything else, was
placed in the trust The bone was picked
entirely DRY; the bOndhoIdeTs were de-
nuded Of their security"
"But who got the three milliOnsY'
asked one of the listeners.
"This is the story of the conspiracy as
told under oath: The consolidation of
the stocks was arranged on the 18th OF
January, 1880, and it's terms were Yir-
tually dictated by Gould. In addition
Gould made contract with the Kansas
Pacific Company Dy which he Gould was
to. become the owner of the SO, 900, 600 of
IG-ver Pacific stock or its proceeds.
This remarkable result was accom-
pished in manner peculiar to Jay Gould. |
On January Il, 1880, Sidney Dillon wrote |
letter to Trustees Gould and Sage, |
making & modest request. He said that |
the Kansas Pacific Company would like /
to have the Denver Pacific stock out Of |
the trust; that 1t was of little or no value !
to the b0ndholders, but that the company |
could make use of it in certain ways"
that would be valuable. Trustees Gould /
aud Sage replied with remarkable |
pr0mptitude TO President Dillon on
the same day, stating that
they would be glad to comply with
his request, but that they had some doubt
as to their strict legal right to do so.
However, they referred Friend Dillon TO
their attorney, and SAID there would be
no trouble. On the very day of this cor
Iesp0ndence the Kansas Pacific company
through its principal stockholder, Jay
Gould, sued this same Jay Gould as
trustee of the consolidated mortgage. 1t
was rather difficult to see how Gould
could have lost anything by this little ar
raugement. The result was that the
trustees we're authorized TO hand over
Inc bondholder's property. On January
the absurd and farCiCal proceeding ter
minated. The ink was hardly dry on the
monumental record when the articles OF
consolidation were signed. Within
twenty-four hours the Denver Pacific
stock was taken out of the safe and trans
ierred almost entirely to Jay Gould"
II was a remarkable steal. No wonder
the world is talking about it. l have II
on the very best authority that Gould was
in constant rehearsal with his personal
counsel for three weeks preparing his tes
timony IN the Pacific Railroad investiga-
Ton. That the testimony was artful was
proved by the failure of all attempts to
break ii. Gould wase frightened this
time. Stealing trust fluids Is q serious
ofense even for man worth 100000,
600. That he realized it WIS plain from
the day he went 10 the stand, for his
was pronounced and pain
fu BLAKELY HALL.
Injection Z cures in 2 to days.